Tag Archives: MDUs

My USF Comments to Congress

A bipartisan group in Congress is tackling the topic of USF reform. They created a portal to solicit comments, which are not being made available to the public. I provided comments to the group on two topics.

The first is Lifeline support, specifically for low-income MDUs. There are two issues faced by those trying to bring broadband to MDUs that have tenants who can’t afford a broadband subscription. The first issue is bringing the needed infrastructure for better broadband. There was hope that BEAD might provide some of the needed solution since non-deployment funds could be used to upgrade low-income MDUs. However, it looks like NTIA might not give the non-deployment funds to states, even though that was mandated by Congress. I’m working with some non-profits that are looking for other ways to fund infrastructure upgrades.

The bigger issue is that the landlords or ISPs that serve low-income MDUs need some ongoing subsidy since tenants can’t afford to cover the cost of broadband. Lifeline can be used for that purpose today in a limited way. However, most Lifeline recipients direct the savings to their cellphone rather than to home broadband.

I’ve suggested some changes to Lifeline that could make it a powerful tool for improving broadband in low-income MDUs.

  • At least for these MDUs, the FCC should double the current $9.25 Lifeline subsidy. That would be enough to make a meaningful subsidy for monthly broadband for a building. It would be great if the Lifeline subsidy were increased in the future for inflation. The $9.25 subsidy meant a lot more when it was created in 1997 than it does today.
  • Landlords should be able to become Lifeline recipients on behalf of their tenants. It would be particularly beneficial if landlords could require tenants to assign them the Lifeline as a component of a rental agreement. For the assignment of Lifeline, a landlord would provide free broadband.

My other comments to the Working Committee were related to the giant subsidy programs in the High-Cost Program. Anybody who has been reading my blog knows that I think the FCC has done a poor job with some of these large subsidy programs.

The CAF II program that gave over $10 billion to the largest telcos was nearly a total failure. Telcos were supposed to use the money to upgrade rural DSL to 10/1 Mbps – but the program started making subsidy payments in the same year that the FCC increased the definition of broadband to 25/3 Mbps. There have been wide criticisms that the telcos never made many of the upgrades and just pocketed the summaries, such as this complaint filed by the Public Service Commission of Mississippi.

RDOF was not a massive failure and, in many cases, was successful, like with the many cooperatives that used the funding to build fiber to their members. But like CAF II, RDOF also failed in many ways. The program started by using terrible FCC broadband maps to define the RDOF areas, and this effort missed many millions of locations that should have been eligible, as witnessed by the many locations not eligible for BEAD. The program ended up with massive defaults on 1.9 million of the 5.2 million locations in the reverse auction. Probably the biggest problem was the mess the RDOF awards made of the broadband landscape by awarding a subsidy to a hodge-podge group of Census blocks that were interspersed with Census blocks that should have been included. This has made it highly challenging to find a broadband solution for the remaining areas and is a big reason that BEAD grant costs are higher than what people think they should be.

My recommendation to the Working Committee is that Congress should not allow the FCC to unilaterally create new giant subsidy programs on its own. It’s poised to launch the 5G for Rural America Fund that looks to have as many problems as the other past programs. Congress should find some way to get buy-in for new programs from outside the FCC. This sounds like a major criticism of the FCC, but this is a regulatory agency that is not staffed by folks who are attuned to what it takes to lure ISPs and carriers to solve the broadband and cellular gaps in rural America.

States: Don’t Give up on MDUs

As States look ahead to how they’ll use BEAD funds beyond broadband infrastructure deployment, one key area of opportunity is emerging: supporting underserved multi-dwelling units (MDUs). The Infrastructure Investment and Jobs Act (IIJA) singles out a funding opportunity for MDUs where a “substantial share” of units lack adequate internet access or are in low-income communities.

While States have already received NTIA approval for how they plan to use non-deployment funds, there is a good chance that the upcoming revised Notice of Funding Opportunity (NOFO) might narrow States to only using funding for purposes specifically allowed in the Act. If that happens, States may be invited to revise their Initial or Final Proposals, giving them a valuable opportunity to rethink and refine their funding strategies.

This blog is a plea for States not to give up on the opportunity to use non-deployment funds to bring better wired-broadband to affordable housing MDUs. Landlords of affordable housing MDUs face a chicken-and-egg dilemma – many affordable housing MDUs don’t have good broadband because the tenants can’t afford to pay market rates for broadband.

The affordable rates needed for success will vary according to the incomes of tenants. In the MDUs that serve residents with the lowest incomes, prices will have to be in the range of $10 to $15 per month. There are affordable housing MDUs where incomes are higher, but generally still not high enough for tenants to afford normal market rates for broadband.

The MDU solution for States to consider is to wire MDUs with fiber or Category 6 cable to enable gigabit speeds within apartments. States should support wired solutions instead of funding  building-wide Wi-Fi, which will not meet the requirements of a served technology and is notoriously inconsistent (has anybody ever loved the Wi-Fi they get in a hotel?)

There are a number of reasons for States to consider this use of any remaining BEAD funding to wire affordable housing and other underserved MDUs.

It’s a lot more affordable to wire buildings than States probably assume. I’ve been doing research with the vendors and technologies used to wire MDUs. My analysis that the cost to retrofit a typical 72-unit MDU complex with Category 6 wire ranges from $300 to $630 per unit. Wiring with fiber costs a little more, and ranges from $450 to $800 per unit. It cost a lot more to wire buildings a decade ago, but modern wiring technologies and techniques have significantly reduced the cost.

It is also getting increasingly easier to find ISPs willing to work with landlords to bring affordable broadband when it’s needed. If the landlord takes on all of the rewiring and infrastructure costs inside an MDU, then ISPs need only bring a fiber connection to the MDU. The cost of a bulk-billed wholesale fiber connection can be made affordable when ISPs and landlords step outside of the industry norm. Most ISPs operate on rolling 3-year contracts for selling to businesses (ISPs view an MDU as a business customer). For example, ISPs and landlords both get a huge benefit by considering ten or even twenty-year contracts for a fiber connection – landlords get lower costs and ISPs eliminate churn.

Because of the affordable cost of rewiring buildings for high-speed broadband, States can do a whole lot of good for a relatively small investment. Even if States pay 100% of the cost to rewire MDUs (and there is no particular reason they should pay 100%), the cost per family to bring better broadband to MDUs is a tiny fraction of the cost to serve a rural family with any broadband solution. BEAD originally held out a hope that it could help to solve the MDU broadband gap, and with non-deployment funds, some of that promise can still be kept.

FCC’s Proposed Ban on Bulk Billing

FCC Chairwoman Rosenworcel proposed a highly controversial rule change that would ban bulk billing practices in MDUs (multi-dwelling units). The justification for the proposed ban is that residents are required to pay for broadband or cable TV service even if they don’t want to buy the service or would prefer to buy from somebody else. The FCC proposal would allow tenants to opt out of any bulk-billing arrangements.

For those not familiar with bulk-billed services, the typical arrangement is for the landlord to buy these services at wholesale rates and include cable TV or broadband in the rent. From interviews I’ve done with tenants, the charges for these services are often not identified and are just a component of rent.

Landlord-provided broadband today often goes beyond just providing Internet  access inside units. Many apartment owners provide ubiquitous WiFi throughout a rental property. It’s also becoming common for landlords to use the ubiquitous WiFi to control smart devices of many kinds, including security cameras that can be seen by tenants, smart thermostats, utility meters, and smart devices to control building functions. It’s not clear how a tenant could somehow opt out of all broadband in such a building since many of the smart functions control everyday functions for tenants.

From a tenant perspective, it’s not hard to understand folks who would rather not pay for traditional cable TV as part of the rent. I have to think that a significant percentage of households that still subscribe to cable service are stuck in bulk-billing arrangements.

Broadband is trickier. A large majority of tenants want broadband, other than those who are happy using only their cellphones, or the small percentage of folks who never use broadband at home. But it’s easy to understand why some folks might be unhappy with underperforming broadband or want a different ISP. From a cost perspective, most landlords say that their charge for broadband is less than the rates of local ISPs, which is easy to believe when considering the prices of the large cable companies. But when landlords bury the cost of the broadband in the rent, tenants can only take their word for it.

ISPs who serve MDUs say this ruling could destroy their business. It’s generally costly to wire an MDU for broadband, and ISPs make a significant investment to get into a building. Their motivation for entering older and smaller buildings is greatly lessened if they can’t count on getting revenue from all tenants. Even scarier is the idea of having to market individually to tenants – often in buildings that don’t give easy access to outsiders.

There are already a lot of ISPs today that won’t serve MDUs because of the extra cost and work involved. There are ISPs saying that they won’t consider MDUs if bulk billing is no longer allowed. This ruling could make it harder for some DMDU tenants to get good broadband. A lot of ISPs have been writing to or meeting with the FCC to plead their case.

One area of particular worry concerns ISPs that serve low-income housing. As might be imagined, there is little profit in these situations, and many ISPs provide low-cost connections to provide a social good. These ISPs know they will go underwater if some tenants decide to eliminate broadband to save money.

Many landlords like the ease of dealing with one ISP, and many have no desire to take on the extra effort involved in opening their buildings to multiple ISPs. These landlords might have the courts on their side since there have been many legal rulings over the years that say that property owners have the ultimate say over what happens inside their buildings.

The biggest problem I see with the proposed rules is that the FCC wants to create a universal rule to apply to a widely divergent market. There are landlords who provide super-fast broadband at an affordable rate, and there undoubtedly are landlords who charge high rates for inferior broadband. There are no rules I can imagine that would satisfy all situations.

The ruling would be a mixed benefit for the public. Tenants who can save money by ditching unwanted services will love this ruling, but tenants who see their broadband rates double if they have to buy directly from a cable company will hate it. Unfortunately, any ruling will produce winners and losers for the public, landlords, and ISPs. I assume the FCC is trying to decide if the proposal will do more good than harm. I can’t imagine a way for them to do that math.

Competition in MDUs

FCC Chairwoman Jessica Rosenworcel announced plans to introduce a Notice of Proposed Rulemaking that would expand customer choice in apartments, condos, public housing, and other multi-tenant buildings.

The NPRM will cover two new areas of regulation. The first is that tenants will be able to opt out of bulk billing arrangements where landlords build broadband or cable TV into the price of rent. It’s an interesting idea and will benefit tenants who don’t want to buy the forced services. Some landlords have padded profits for years with practices like distributing a bulk satellite TV feed to tenants at a markup. In a country where less than half of homes still want to watch linear cable programming, it seems likely that a whole lot of tenants will opt out of that service, given the option.

Allowing people to opt out of broadband is trickier. There are certainly landlords who buy bulk broadband and mark it up as a moneymaker. But there are many landlords today that recognize that having gigabit fiber broadband is a great marketing tool for their apartments. These landlords buy a bulk broadband connection and provide broadband to tenants at a price lower than what the tenants could find on the market. Nobody should be forced to buy something they don’t want, but if enough tenants opt out of this arrangement, the landlord will likely have to raise the rates for everybody else. This is a dilemma for landlords, and it could result in landlords ceasing to offer cheap broadband. That might disadvantage more households than it benefits.

It gets even trickier to think about the many arrangements that have been made to bring bulk broadband to public or low-income housing. If tenants can opt out of these arrangements to save a little money or lower rent, it could kill the model of bringing broadband to public housing.

The NPRM also proposes to “increase competition for communications service in these buildings by making it more profitable for competitive providers to deploy service in buildings where it is currently too expensive to serve consumers because tenants are required to take a certain provider’s service.”

This proposal really piques my interest. I’ve been thinking about it, and I can’t think of anything that regulators can do to make it cheaper to physically bring broadband into MDUs. Landlords often have restrictions on the way that ISPs can build infrastructure. For example, they might require outdoor drops to be buried. They might not allow the installation of communications devices like fiber ONTs on the outside of a building. They might have restrictions on not allowing open wiring in public spaces. They might require an ISP to get its own electric feed and meter.

It’s hard to think that the FCC could eliminate these kinds of restrictions. The FCC has run afoul in the past when creating rules that conflict with the rights of property owners for issues like inside wiring and antenna placement. It seems unlikely that the FCC can find a way to reduce the cost of physical and aesthetic restrictions, and I’m looking forward to see what the FCC has in mind.

There is nothing that the FCC can do to fix the market behavior of ISPs. New rules that improve the chance of ISPs to compete in large MDUs will be welcome news to some ISPs – but new rules might drive other ISPs away from the MDU market. It’s hard to think that these new rules will have a significant impact on the majority of MDUs in the country, which are eight units or less. It’s hard to think of any rules that will boost competition in smaller MDUs.

However, the FCC is right to keep trying. The National Multifamily Housing Council says there are currently 23 million apartment units in the U.S. A lot of current broadband rules and subsidies have been clearly aimed at improving broadband in single family homes. The FCC has tried for several decades to improve competition in MDUs trying rules that did things like making it harder for landlords to have exclusive arrangements with an ISP. But landlords and ISPs have always quickly found loopholes in every set of new rules.

Seattle Tackles MDU Broadband

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Our industry takes it as general wisdom that urban areas have better broadband than rural areas, and as a general premise it’s true. But within urban areas, the segment of the community with the widest range of broadband coverage are apartment buildings. I think you can go to every big city and find some apartments with gigabit speeds while other apartment buildings have little or no broadband.

There are several reasons for the wide variance in broadband coverage. First, landlords have always had a say about what carriers they will allow in their buildings. I’ve seen numerous cases of landlords that include slow broadband into the rent and don’t let faster ISPs into their building. Some buildings don’t have broadband due to what can only be described as redlining where ISPs avoided poor or troubled neighborhoods. Finally, some older apartment buildings are expensive to rewire due to the way they were originally constructed.

The City of Seattle is tackling the issue in an interesting way. Over half of the living units in the city are in MDU’s (multi-dwelling units), meaning apartments, condominiums, and townhouses. In 2019 almost 81% of new units built in the city are in MDUs. The city views the ability of MDU tenants to have the same broadband quality and options as single family homes as a digital equity issue.

The city has been gathering facts about MDU broadband for several years and came to understand the wide variance of broadband in different buildings. They found that MDUs routinely don’t have the same broadband options as nearby single-family homes. The city conducted a survey in 2017 that found that 95% of MDU tenants have access to broadband of at least 25/3 Mbps. However, the survey found that few tenants in the city have a competitive choice between multiple ISPs at speeds of 100 Mbps or faster. The tenants who have the choice of multiple fast ISPs were the most satisfied with their broadband. The city concluded from the survey that choice was just as important to MDU tenants as broadband speeds.

Probably the most important finding of Seattle’s research is that there is a wide variance among landlords in terms of understanding their broadband options. They found landlords who know very little about broadband up to landlords that have sophisticated tech plans. The city found that many landlords have relied on the advice from ISPs – which clearly can be self-serving and not in the benefit of landlords and tenants.

The city concluded that one way that they could help improve MDU broadband was by helping to educate landlords. The Seattle Office of Cable Communications launched an initiative they call B4B – Build for Broadband. Their goal is to create awareness of the importance of broadband for landlords and to provide educational content for the many landlords that can’t afford telecom planners and consultants.

The city has undertaken an initiative to provide information about broadband to landlords. They’ve started a series of webinars covering topics of interest to landlords. I should disclose that I helped the city with a webinar that compared wired and wireless technologies. The city is also gathering other information for landlords on their website.

This initiative makes a lot of sense in Seattle since it has one of the highest percentages of MDU residents in the country. However, any city that has MDUs could consider something similar. I’ve done broadband feasibility studies for cities that have between 20 to 50 MDU complexes, and inevitably they are as widely disparate as the ones in Seattle. There usually are a few that have little or no broadband and a few that have been wired with fiber and that offer gigabit broadband.

Cities are often surprised by the wide variance in broadband availability and speeds at different MDUs. Cities are also often surprised to hear that even if they find a broadband solution for improving broadband for single-family homes and businesses, that the solution will not necessarily apply to MDUs. I know of many fiber overbuilders that skip past MDUs due to the cost of rewiring the buildings, the reluctance of landlords to let them in, or the marketing challenge of keeping up with tenant churn.

It’s not hard for smaller cities to take an inventory of the state of broadband in their MDU community. It’s normally as simple as to visit each apartment complex to find out what’s available to tenants. While smaller cities are not going to undertake an educational process with the scope of Seattle’s, cities can assist MDUs with poor broadband to find a better solution. Sometimes it’s as easy as helping to match competitive ISPs and landlords. It might mean getting landlords talking to each other. One thing is for sure – no solutions can be found until the problems are identified.

Open Access for Apartment Buildings

San Francisco recently passed an interesting ordinance that requires that landlords of apartments and multi-tenant business buildings allow access to multiple ISPs to bring broadband. This ordinance raises all sorts of regulatory and legal questions. At the most recent FCC monthly meeting the FCC jumped into the fray and voted on language that is intended to kill or weaken the ordinance.

The FCC’s ruling says that a new ISP can’t share wiring that is already being used by an existing broadband provider. I call this an odd ruling because there are very few technologies that share wires between competitors – with most fast broadband technologies a new ISP must rewire the building or beam broadband wirelessly. This means the FCC’s prohibition might not make much of a difference in terms of overturning the San Francisco ordinance. The only competitive broadband technology that routinely uses an existing wire is G.Fast, and even that can only be used by one broadband provider at a time and not shared. I can’t think of any examples of a practical impact of the FCC ruling.

The FCC’s ruling is odd for a number of other reasons. It’s certainly out of the ordinary for a federal agency to react directly to a local ordinance. My guess is that the FCC knows that many other cities are likely to jump onto the open access bandwagon. Cities are getting a lot of complaints from apartment tenants who don’t have access to the same broadband options as single family homes.

The FCC ruling is also unusual because it violates the FCC’s overall directive from Congress to be pro-competition. The FCC order clearly falls on the side of being anti-competitive.

What I find most striking about this decision is that this FCC gave up authority to regulate broadband when they killed Title II regulation last year. I guess what they meant was that they are giving up regulating broadband except when it suits them to regulate anyway. It’s an interesting question if the agency still has the authority to make this kind of ruling. It’s likely this lack of regulatory authority that forced the FCC to make such a narrow ruling instead of just overturning the San Francisco ordinance. I always knew it wouldn’t be long before the FCC selectively wanted back some of their former Title II authority.

The MDU market has an interesting history. Historically the large apartment buildings were served by the incumbent providers. The incumbents often stealthily gave themselves exclusive rights to serve apartments through deceptive contractual practices, and the FCC prohibited some of the most egregious abuses.

For many years competitors largely weren’t interested in apartments because the cost of rewiring most building was prohibitive. In the last few years the MDU market has changed significantly. There are now wiring and wireless technologies that make it more affordable to serve many large apartment buildings. There are now numerous competitors operating in the space. Many of them bring a suite of services far beyond the triple play and also bring security, smart camera solutions to make tenants feel safe, smart sensors of various kinds, and WiFi in places like hallways, stairwells, parking garages and outside. These new competitors often require an exclusive contract with a landlord as a way to help cover the cost of bringing the many ancillary services.

There is another regulatory issue to consider. There have been several laws from Congress that have been tested in the courts that give building owners the right to keep ISPs off their premise – this applies to single family homes as well as the largest apartment buildings. It won’t be surprising to see building owners suing the City for violating their property rights.

Yet another issue that muddies the water is that landlords often elect to act as the ISP and to build broadband and other services into the rent. Does the San Francisco ordinance prohibit this practice since it’s hard for any ISP to compete with ‘free’ service.

Another area affected by the ordinance might best be described as aesthetics. Landlords often have stringent rules like requiring that ISPs hide wiring, electronics boxes, and outdoor enclosures or huts. It’s a bit ironic that the City of San Francisco would force building owners to allow in multiple ISPs and the myriad wires and boxes that come with open access. San Francisco recently got a positive court ruling saying that aesthetics can be considered for small cell deployments and it seems odd in MDUs that the City is favoring competition over aesthetics.

At the end of the day I think the City might be sorry that they insinuated themselves into an extremely complicated environment. There are likely dozens of different relationships today between landlords and ISPs and it seems like a slippery slope to try to force all apartment owners to offer open access.

I know cities have been struggling with the open access issue. They receive complaints from apartment tenants who want different broadband options. It’s not hard to understand why a city with a lot of apartment dwellers might feel compelled to tackle this issue. I know other cities that have considered ordinances like the San Francisco one and abandoned the issue once they understood the complexity.

The City made an interesting choice with the ordinance. The City elected to require open access to help foster consumer choice. However, it’s possible that the long-term results might not be what the City expected and the ruling could drive away the creative ISPs who elect not to compete in an open access environment.

It seemed almost inevitable that the City ordinance will be challenged by somebody – but the courts were a more logical place to fight this battle than at the FCC. If anything, the FCC has just clouded the issue by layering on a toothless prohibition against the sharing of wires.

Big Telcos and Broadband

A recent article in Telecompetitor reports that analysts at Moffett Nathanson expect the big telcos to start making inroads into the near-monopoly for broadband currently enjoyed by the cable companies. The article focused specifically on AT&T, but some other big telcos like CenturyLink are also aggressively expanding fiber networks.

I would have to assume that the analysts got the following goals directly from AT&T because I can’t find any other references to these specific goals. But each of these is in line with statements made by AT&T executives over the last year. According to the article, AT&T broadband goals over the next few years are as follows:

  • Offer broadband speeds below 50 Mbps to 30 million passings using DSL;
  • Offer broadband speeds between 50 – 100 Mbps to 20 million passings using paired copper VDSL;
  • Offer ‘near gigabit’ speeds to 10 million passings using via 5G wireless;
  • Offer gigabit speeds using FTTH technology to 14 million residential passings and 8 million business passings.

The real news here is in the last two bullet points. AT&T accepted the goal from the FCC for passing 12.5 million customers with FTTH from the merger with DirecTV. It’s big news if they intend to extend that to 22 million passings. And the goal of using millimeter wave radios to reach another 10 million potential customers is something new.

If AT&T meets these goals they will be bringing serious competition to the cable companies. AT&T and the other telcos have been bleeding DSL customers for over a decade and handed the cable companies a near-monopoly on fast broadband in most urban and suburban markets. According to Moffett Nathanson the telco expansion will bring near-gigabit speeds on telco networks to 32% of the country.

It’s important to understand where the new AT&T broadband is being built. The majority of the new coverage is in three market niches – apartment buildings, new greenfield housing developments and business districts. AT&T’s expansion has largely focused on these specific market niches and is likely to continue to do so. AT&T is not proposing to duplicate what Verizon did with its FiOS network and bring broadband to older single family home neighborhoods. They are instead focusing on buildouts where the the cost of construction per customer is the lowest – the ultimate cherry-picking network.

This means that the AT&T coverage will bring the opportunity for gigabit broadband to a much larger footprint, but that’s not always going to bring customer choice. In the MDU market many landlords are still allowing only one ISP into their apartment complexes. As telcos like AT&T compete with the cable companies for this market the broadband speeds in apartments and condos will get much faster, but many customers will still only have the option to buy from whatever ISP that landlord has allowed.

I have to admit that this market shift to bring broadband to MDUs caught me a bit by surprise. Many years ago Verizon showed that there is a successful business plan for building fiber to older residential neighborhoods. In the northeast Verizon still carries significant market share in its FiOS neighborhoods, and customers consistently rate them as having better customer service than the cable companies. Other telcos like CenturyLink are copying the Verizon model and are building swaths of fiber in residential neighborhoods.

The traditional wisdom was that it is too costly to bring fast broadband to apartments. A decade ago bringing fiber to an apartment meant rewiring the whole building with fiber – and for many apartments that is prohibitively expensive. But there have been technology advances that have made this more feasible. For example, much of the ‘near-gigabit’ speeds can be achieved by using G.Fast technology over existing coaxial or telco cable in older apartments. There have also been big improvements for indoor fiber deployments that include small flexible fibers and techniques for installing fiber inconspicuously in hallways. Many buildings that seemed too costly to serve years ago now make economic sense. Finally, the potential to deliver backhaul to an MDU using millimeter wave radios is going to eliminate the need to build as much fiber.

The real big unknown is how successful any of these big companies will be with 5G. As I’ve been writing lately there are still a lot of barriers that might make it difficult for AT&T to use the wireless technology to cover 10 million passings. We’re going to have to wait to see some real deployments over the next few years to see if the technology works as promised and if the cost of deployment is as cheap as anticipated. But the one thing that these analysts have gotten right is that the big telcos are finally fighting back against the cable monopolies they helped to create by sticking with DSL too long. It’s going to be interesting to see how well they do in winning back customers that they lost over the last two decades.

G.Fast over Coax

There is yet another new technology available to carriers – G.Fast over coaxial cable. Early trials of the technology show it works better than G.Fast over telephone copper.

Calix recently did a test of the new coaxial technology and was able to deliver 500+ Mbps for up to 2,000 feet. This is far better than current G.Fast technology over copper which can handle similar data speeds up to about 800 feet. But telephone G.Fast is improving and Calix just demonstrated a telephone copper G.Fast that can deliver 1 Gbps for about 750 feet.

But achieving the kinds of speeds demonstrated by Calix requires a high-quality telephone copper network. We all know that the existing telephone and coaxial networks in existing buildings are usually anything but pristine. Many existing coaxial cables in places like apartment buildings have been cut and re-spliced numerous times over the years, which will significantly degrade G.Fast performance.

This new technology is definitely going to work best in niche applications – and there may be situations where it’s the clearly best technology for the price. There are a surprising number of coaxial networks in place in homes, apartment buildings, schools, factories and older office buildings that might be good candidates for the technology.

A number of telcos like CenturyLink and AT&T are starting to use G.Fast over telephone copper to distribute broadband to apartment buildings. Since as the incumbent telephone company they can make sure that these networks are available to them. But there might be many apartment buildings where the existing coaxial network could be used instead. The ability to go up to 2,000 feet could make a big difference in larger apartment buildings.

Another potential use would be in schools. However, with the expanding demand for broadband in classrooms one has to wonder if 500 Mbps is enough bandwidth to serve and share among a typical string of classrooms – each with their own heavy broadband demand.

There are also a lot of places that have coaxial networks that you might not think about. For example, coaxial wiring was the historic wiring of choice for the early versions of video surveillance cameras in factories and other large businesses. It would not be hard to add WiFi modems to this kind of network. There are tons of older hotels with end-to-end coaxial networks. Any older office buildings is likely to have coaxial wiring throughout.

But there is one drawback for the technology in that the coaxial network can’t be carrying a cable TV signal at the same time. The coaxial G.Fast operates at the same frequencies as a significant chunk of a traditional DOCSIS cable network. To use the technology in a place like an apartment would mean that the coaxial wiring can no longer be used for cable TV delivery. Or it means converting the cable TV signal to IPTV to travel over the G.Fast. (but that wouldn’t leave much bandwidth for broadband.) But still, there are probably many unused coaxial wiring networks and the technology could use them with very little required rewiring.

It’s more likely that the coaxial G.Fast could coexist with existing applications in places like factories. Those networks typically use MoCA to feed the video cameras, at frequencies that are higher than DOCSIS cable networks.

But my guess is that the interference issue will be a big one for many potential applications. Most apartments and schools are going to still be using their networks to deliver traditional video. And many other coaxial networks will have been so chopped up and re-spliced over time to present a real challenge for the technology.

But this is one more technology to put into the toolbox, particularly for companies that bring broadband to a lot of older buildings. There are probably many cases where this could be the most cost effective solution.

The Vision of Next Century Cities

Next Century Cities is an organization comprised of 166 mayors of cities that have the mission statement to make sure that all of their citizens have access to fast, affordable and reliable Internet access. The members range from small towns to NFL cities. They recently published their 2017 Policy Agenda that highlights the issues that they think are the biggest impediments to meeting their broadband goals. These goals are worth some thought since they differ from the wish list of most other stakeholders in the industry.

Restore Local Authority. Cities want to have a hand in finding their own broadband solutions and they don’t want to be restricted by state or federal law from doing so. I would note that the vast majority of cities do not want to be a retail ISP, but they still want to have the ability to make the investments needed to meet their broadband goals. They want to be able to form meaningful public-private partnerships. And more than anything else they want the legal authority to find broadband solutions.

Competition in Multi-Dwelling Units (MDUs). Cities with any significant percentage of citizens living in MDUs are concerned that those citizens are often not getting the same quality broadband products or having the same array of choice as single family homes. For example, even where fiber has been built, overbuilders often skip MDUs that present construction or operational issues. Cities are also still concerned about the proliferation of exclusive contracts between MDU owners and ISPs.

Anti-Monopoly and Competition. Mayors are concerned by what they see as shrinking competition. In many cities the cable companies have won the broadband battle against the telco. Where there are no significant third-party fiber overbuilders the mayors see broadband becoming a monopoly product. The cities generally are against the mergers of gigantic ISPs.

High-Quality Low-Income Internet Access. Cities are still looking for ways to solve the digital divide. They understand that there is a significant percentage of the population that doesn’t have broadband because they can’t afford it. They are currently dismayed by what they perceive as the FCC walking away from the Lifeline program that can subsidize broadband service in low income households.

Small Cell/5G/DAS. Cities are grappling with how to best foster and physically accommodate the coming proliferation of wireless transmitters that will be spread through the community to distribute 5G and millimeter wave spectrum. They are anticipating a host of new wireless broadband products, but they have concerns about how to deal with numerous wireless providers wanting to utilize the same key locations.

One Touch Make Ready. Cities are in favor of regulatory changes that make it easier for fiber overbuilders to get onto poles or into existing conduits. The ‘one touch make ready’ concept would greatly speed up the process and reduce the costs of the pole attachment process. It would give a new fiber builder the ability to more easily move wires of existing carriers to speed up the construction process. In cities with numerous existing carriers on pole lines the cost and time involved in gaining approval and of implementing the changes needed to accommodate a new carrier can be numbingly slow.

Infrastructure Investment. Cities want to be included in broadband infrastructure spending that might come from any federal infrastructure plan. They fear that any broadband money will be aimed only at rural areas and the FCC still estimates that there are more than 10 million people in large urban areas that can’t buy bandwidth that meets the FCC’s 25/3 Mbps threshold. And while smaller rural towns and cities might have broadband that meets that test, they often have older networks that are far below the standards of metropolitan areas.

Summary. Of all of the various stakeholder groups involved in broadband infrastructure deployment, cities the most focus on getting quality broadband to everybody. That focus puts them into opposition with incumbent ISPs on some issues. Experience shows us that cities are often more aligned with new overbuilders, at least to the extent that those ISPs don’t want to only cherry-pick the most lucrative customers in the city. Because of various state restrictions, cities vary widely in how much influence they have over broadband. But cities everywhere are the ones that determine some of the key processes in broadband deployment such as permitting and local construction practices. And that means that their goals must be recognized by anybody wanting to deploy new broadband in cities.

Broadband Access to Apartment Buildings

Seal_of_San_FranciscoMark Ferrel of the Board of Supervisors for San Francisco has proposed an ordinance that would require multi-tenant buildings to provide access to broadband providers. This would apply to both residential and commercial properties.

You can understand why the city wants to tackle this issue. The nationwide percentage of families living in apartments is around 35%, but in San Francisco apartments represent 63% of housing units. And the percentage of families living in apartments is high in a lot of big cities – in New York City it’s 68%; in Seattle it’s 54%; in Atlanta it’s 56%.

Cities understand that bringing fiber to their city is not enough if it only benefits single-family homes and standalone businesses. As I wrote in a recent blog there are millions of urban households that don’t have access to broadband, and a lot of these situations are due to apartment owners that have excluded broadband providers. It’s fairly normal for apartment owners to have made deals years ago with service providers to serve their buildings on a revenue-sharing basis. The landlord may or may not include the triple-play products in the rent, but they get a kick-back from the service providers as a reward for exclusive access.

A few years back the FCC put some restrictions on cable companies and ISPs from entering into certain kinds of exclusive arrangements with building owners. It was a fairly common practice, for example, for an ISP to agree to wire a building for free, but then retain ownership of all of the wiring. In these cases the owner gave up all rights to the cable company or telco and it’s those entities that keep out competition.

I think there is a general impression that the FCC order forbade the cable companies from entering into all exclusive arrangements. But unfortunately it did not and it instead bans only certain types of arrangements – but not all. So I would expect at some point for this ordinance to be challenged at the FCC when it bumps into arrangements that are still allowed. But I think cities expect legal challenges when they tackle new ground.

This is also not going to be as clean-cut as Mr. Ferrel is hoping for. The ordinance grants access to multi-tenant buildings to any state-licensed ISP. Unfortunately, in many buildings there are physical restrictions to allowing even a second ISP. There might be very limited space for an ISP to put a rack of equipment. There are often issues with having enough space in the risers (the conduits that carry wires between floors).

And many apartments can’t accommodate having ‘open access’ where any ISP can gain access to the wiring for any unit from some central location. Unfortunately many apartments are not wired with ‘home run’ drops that go from a core to each unit, but instead often share the same cabling for multiple units.

There are often limited options for getting new wires to apartments. I can picture some really messy situations if multiple ISPs are granted access to the same buildings and each tries to string cables through hallways or other public areas. You can picture the same sort of clutter that we often see on urban poles with too many wires crammed into limited space.

But even with all of these issues, Mr. Ferrel is on the right track. The fact is that many apartment dwellers are being denied access to fast Internet due to arrangements made by the building owners. This ordinance is the first attempt I’ve seen for solving the lack of broadband and choice for a large percentage of urban households.

The ordinance tries to be fair to apartment owners and allows them to expect reasonable compensation for access to their buildings. Obviously that concept will need work to put into practice, but the ordinance doesn’t open up buildings to anybody to build without rules.

There is one thing the ordinance doesn’t tackle. What if nobody wants access to an apartment? A significant portion of urban apartments without good broadband access are low-income housing and ISPs and incumbents have been accused of redlining such customers for years. So this kind of ordinance can’t solve everything – but it’s a start.